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Money Rules

Gold-flecked ice cream wasn’t part of the picture that Shiite Muslim clerics painted during the Iranian Revolution, when they promised to lift the poor by distributing the country’s vast oil income equally across society.

But more than three decades later, record oil profits have brought in billions of dollars, and some people here are enjoying that decadent dessert. The trouble is, it’s just a small group of wealthy Iranians. Despite the promises of the revolution, many here say the gap between rich and poor has never seemed wider.

Iran’s new wealthy class has succeeded in tapping the opportunities provided by a vast domestic market, sometimes aided by corruption and erratic government policies. It includes children of people with close connections to some of Iran’s rulers, as well as families of factory owners and those who managed to get huge loans from state banks at low interest rates. The oil windfall — nearly $500 billion over the past five years — has also played a central role in establishing this small group that is visibly enjoying its profits.

Both supporters and critics of President Mahmoud Ahmadinejad say some of his economic policies designed to counter inequality are actually making things worse for many. And although some statistics show the gap between the Islamic Republic’s rich and poor has been stable over time, scenes of the rich flaunting their wealth have left many Iranians complaining.

From the top of Tehran’s 1,427-foot-high Milad Tower, Iran’s poor appear as tiny dots in the streets below.

“We provide a calm and luxurious atmosphere, away from Tehran’s daily problems,” said Ahmad Talaee, one of the owners of the Crown restaurant, as he received guests in the VIP section, with room for nearly 300 to enjoy $280 fixed-price meals, golden ice cream not included.

Construction workers in worn-out shoes waited in the hallway one recent afternoon to make final fixes at the restaurant, which opened in June, as a young couple in designer clothes fed each other shrimp flown in from the Persian Gulf. “As you can see,” the owner said, “we are re-creating the fairy tales of the legendary stories of ‘1,001 Nights’ right here in Tehran.”

But that ritzy lifestyle, set against a backdrop of increasing economic hardship for millions of ordinary Iranians, is leading to open criticism.

People are writing public letters complaining about the rise in inequality. Influential conservative blogger Amir Hossein Sabeti wrote last month that the shift in the way Iranians conduct themselves in public, increasingly ignoring the soberness that the revolution prescribed, is a bigger threat to Iran’s ideology than the United States or Israel.

“How can we discuss decency, simplicity and support for the oppressed when we have this culture of ostentatiously showing off wealth?” he asked. “Woe unto us the day that our policies stop supporting the needy, but support the wealthy,” he wrote, quoting famous words from the late founder of the Islamic Republic, Ayatollah Ruhollah Khomeini.

The resentment over inequality has a strong political dimension in Iran. During his two election campaigns, Ahmadinejad attacked a group of influential clerics connected to former president Ali Akbar Hashemi Rafsanjani, accusing them of using their positions to accumulate vast wealth. But some of his closest aides are also accused of corruption. The public attacks have left the impression that many who lead the country have been unable to avoid the temptation to tap the vast oil wealth for personal use.

Iranians’ sense that they had been left out of the oil boom was a key factor in the downfall of Western-backed Shah Mohammad Reza Pahlavi, experts say.

“Anger over inequality had been the main motivation for people to join the 1979 revolution,” said Hossein Raghfar, an economist who recently quit his post as an adviser to Ahmadinejad’s government because, he said, he disagreed with its policies. “But after the dust settled down, we quickly witnessed a marriage of power and wealth in Iran. Now we are no different from the United States.”

Although Ahmadinejad declared recently that inequality is on the decline, Raghfar disputed government statistics. He also stressed that, particularly in a society based so strongly on ideology, perception matters a lot. Reports that about 2.5 million children are working rather than attending school, and of an increase in legal kidney sales — along with a recent price drop, from $10,000 to $2,000, because so many people are selling their organs for cash — give people the clear idea that they are sliding into poverty, he said.

The financial pressures on Iranian society can be seen everywhere, Raghfar said. “There is a rise in crime, prostitution and an underground economy thriving on corruption,” he said. “Believe me, this is not what we expected when we joined the revolution.”

The way wealth is distributed in the Islamic Republic is a growing concern for Iranian leaders. In a keynote speech during Iran’s New Year ceremonies in March, Supreme Leader Ayatollah Ali Khamenei urged officials to act, saying the disparities were intolerable and not accepted by Islam.

Ahmadinejad’s 2005 campaign promise to establish “social justice” was one of the main reasons Khamenei gave for supporting his candidacy. But some of the president’s supporters say many of his policies meant to redistribute wealth have had adverse effects.

In December, Ahmadinejad implemented a radical overhaul of the way state subsidies are . By giving money directly to the poor, he said, justice would be established. At the same time, however, prices of food and utilities have been allowed to rise to market levels, at times tripling or more.

Now, more than 60 million of Iran’s 70 million citizens receive monthly handouts of $40, while inflation has risen 26 percent compared with the corresponding period last year, according to figures released in July by the Iranian Central Bank.

Although the new policies did not lead to the popular unrest that many had predicted, their long-term consequences are not yet clear. But plenty of Iranians are unhappy.

Several state-run newspapers, in a rare move, printed a letter in June from a housewife in a remote province who said she could no longer afford to feed her family.

Masoumeh Kamali said she voted for Ahmadinejad to help him reduce inequality. “But now,” she wrote, “meat has gotten so expensive that we must banish it from our lives. Mr. President, the increased prices have broken the backs of the people.”

The official Jomhuri-e Eslami newspaper followed with an editorial declaring that Iranians “are tired of false promises, of the cost of living, poverty, unemployment and injustice.”

At the Milad Tower, ordinary Iranians can buy $20 tickets to ride an elevator to the main observatory, where they can see dramatic views of the capital and, through tinted double glass, the restaurant’s VIP section.

Inside, the expensive menu is a source of pride. “We work hard here,” said Talaee, as he asked a waiter to describe the ice cream, which also includes edible silver and caviar. “People have the right to do what they want with their money. That has nothing to do with politics.”

First published in WashingtonPost.com.

AUTHOR
Thomas Erdbrink has covered the Islamic Republic of Iran for The Washington Post since 2008. Before that, he reported extensively in the region, covering the war in Iraq and other conflicts.

The revolution of 1979

A demolition of a country,a demolition of a culture,a demolition of humanity,a demolition of dignity and a demolition of inocent and friendship.by Islamic ideology with co-operation so called democratic countries in the west and commonist countries in the east.

Good Point, about the Revolution.

He quoted, "Iranians’ sense that they had been left out of the oil boom was a key
factor in the downfall of Western-backed Shah Mohammad Reza Pahlavi,
experts say."

And that's because the Revolution was mainly engineered outside Iran, with the use of propaganda and foreign media. Far from Iranians struggling in poverty as they are today, the Shah was responsible for creating the largest growing middle class in the world, irans economy was 4 times larger than Turkeys and among the 9 richest in the world able to entirely pay for everyones school & college education, something which is not even enjoyed in the West.

The amazing quality of the Shah was that he accomplished this with less than 1/10th the income from oil the Regime has enjoyed, infact when he left the country its projected growth was spectacular.

Iranians were not entirely ungrateful people, they were misinformed and deceived regarding how good the Shah was.